Photo source: Free Malaysia Today
Nvidia has surpassed Apple to become the world’s most valuable company, a shift that occurred on Friday amid a record-breaking surge in its stock, driven by an overwhelming demand for its specialised artificial intelligence (AI) chips.
According to data from LSEG, Nvidia’s market capitalisation briefly reached USD $3.53 trillion, edging out Apple’s valuation of USD $3.52 trillion. By the end of the trading day, Nvidia’s stock had increased by 0.8%, resulting in a market value of USD $3.47 trillion, while Apple’s shares rose 0.4%, valuing the company at USD $3.52 trillion.
Earlier this year, in June, Nvidia had momentarily held the title of the world’s most valuable company before being overtaken by Microsoft and Apple. The market capitalisations of these three tech giants have been closely contested over recent months.
As of now, Microsoft’s market value is approximately USD $3.18 trillion, with its stock also up 0.8%.
Nvidia is recognised as the leading supplier of processors utilised in AI computing and has emerged as a key player in the competition among tech giants like Microsoft, Alphabet, and Meta Platforms to dominate this burgeoning field.
Historically known since the 1990s for designing gaming processors, Nvidia’s stock has appreciated by about 18% in October alone, buoyed by significant gains following OpenAI’s announcement of a USD $6.6 billion funding round.
The stock’s rise was further supported on Friday after Western Digital, a data storage manufacturer, reported quarterly profits that exceeded analysts’ expectations, enhancing optimism regarding data centre demand.
On Tuesday, Nvidia’s shares reached an all-time high following a rally that began last week when TSMC, the largest contract chipmaker globally, reported a forecast-beating 54% increase in quarterly profits driven by rising demand for AI-related chips.
Conversely, Apple faces challenges with lukewarm demand for its smartphones. In China, iPhone sales dropped by 0.3% in the third quarter, while rival Huawei saw a remarkable 42% increase in phone sales.
As Apple prepares to disclose its quarterly results on Thursday, analysts predict an average revenue growth of 5.55% year-over-year to USD $94.5 billion. In contrast, projections for Nvidia suggest nearly 82% revenue growth to USD $32.9 billion.
Furthermore, Nvidia’s substantial gains have also made its stock appealing to options traders as recent data indicates that Nvidia’s options are among the most actively traded daily.
This year alone, Nvidia’s stock has surged nearly 190%, fueled by an explosion in generative AI applications leading to numerous optimistic forecasts from the company.